Wednesday, July 19, 2017

ID cards mandatory to deposit money in others' accounts

The central bank has made it mandatory for the depositors to show their identification card, if they are depositing Rs 100,000 or more cash in others' bank account. Bank and financial institutions (BFIs) may not accept cash, if depositors fail to show identification documents and reason for such deposit, according to the new rule introduced by the Nepal Rastra Bank (NRB) to check money laundering and terrorism financing. The new rule came into effect from the new fiscal year.
Earlier, BFIs used to ask clients to show their identity card only when withdrawing huge amount of cash. The central bank has now made it mandatory for the BFIs to seek identification documents even while depositing cash.
The central bank, in its recent circular to the BFIs, said that the new rules has been brought to introduce additional provisions on Money Laundering Prevention Act, 2008 and Assets (Money) Laundering Prevention Rule, 2016, to prevent the financial and banking system getting abused by the dirty money. "The new requirement is to identify and verify the client's identity popularly known as know-your-customer (KYC) process," the central bank added.
Likewise, the clients also cannot do cash transaction of more than Rs 1 million barring some central bank-prescribed circumstances. "The BFIs would also not provide withdrawal of cash of Rs 1 million or higher."
The new rule aimed at curbing abuse of banking channel for money laundering and terrorist financing is cumbersome could also be instrumental for the people to opt for non-banking channel for transaction, according to the bankers.